Opinion
W.C. No. 4-701-838.
April 10, 2008.
FINAL ORDER
The respondents seek review of orders of Administrative Law Judge Cannici (ALJ) dated July 17, 2007 and January 8, 2008 that found the claimant was an employee of the Brisk Transportation Services when he was injured and ordered the respondents to pay the reasonable and necessary medical benefits to cure and relieve the claimant of his industrial injury. We affirm both orders.
The ALJ originally entered an order on June 28, 2007 in which he found that the claimant was an employee when he was injured while working as a truck driver for the employer on November 9, 2004. The ALJ reserved all other issues for future determination. The respondents filed an unopposed motion for entry of corrected order noting the order had not addressed the claimant's entitlement to medical benefits, the identity of the authorized providers and the medical treatment or bills for which the respondents were liable. The ALJ entered a corrected order on July 17, 2007, which found the respondents were financially responsible for all of the medical treatment that was reasonable and necessary to cure and relieve the effects of the claimant's November 9, 2004 industrial injury. The ALJ again reserved all other issues for future determination. The respondents sought review of the July 17, 2007 order and we dismissed the petition to review without prejudice for lack of a final order because it had not been determined what treatment was reasonably necessary and consequently, the order did not award or deny the claimant any particular medical benefit. The ALJ entered an order dated January 8, 2008, which found the respondents liable for a May 8, 2006 bill from Dr. Gadi for medical treatment that is reasonable and necessary to cure and relieve the effects of the claimant's November 9, 2004 industrial injury. This appeal by the respondents followed.
The parties stipulated the claimant suffered injuries on November 9, 2004 while performing services for Brisk Transportation, L.P. (Brisk) as a truck driver. Brisk is a common carrier that picks up and delivers trailers loaded with products for grocery stores. Brisk uses a 100 percent owner operated fleet of trucks to fulfill its contractual obligations. The claimant formed a company known as "Round to it Trucking" and purchased a tractor to haul products. The claimant executed an Independent Contractor Agreement with the employer in 2003.
The ALJ determined that because Brisk is a common carrier and the claimant worked for the employer as a driver pursuant to § 40-11.5-102, C.R.S. 2007, he is excluded from the definition of "employee." Thus the ALJ found that the claimant is presumed to be an "independent contractor" in the absence of clear and convincing evidence. However, pursuant to § 40-11.5 102(5)(a) C.R.S. 2007 a lease agreement that excludes a driver from the definition of "employee" must provide workers' compensation coverage or a private insurance policy that offers similar coverage. The claimant was given an application for insurance through Great American Insurance Group. The employer did not offer the claimant workers' compensation coverage. The ALJ found that the Great American policy did not provide coverage "comparable" to the benefits provided by Colorado's Workers' Compensation Act (Act) within the meaning of §§ 40-11.5.102 and 8-40-301. The ALJ concluded that the claimant was an employee when he was injured while working as a truck driver for Brisk on November 9, 2004.
I.
The respondents contend that the ALJ erred in his application of § 8-40-301. We disagree We first note that the panel was not persuaded by similar arguments made by the same respondents in Abramczuk v. Brisk Transportation, L.P., W.C. No. 4-688-350 (November 19, 2007). We are aware that Abramczuk is on appeal, but we are not persuaded to depart from our previous reasoning.
In Abramczuk, we noted that 8-41-301 requires that in order to recover workers' compensation benefits the claimant must be the respondent's "employee" at the time of the injuries. An individual who is an independent contractor is not an "employee." Section 8-40-202(2)(a), C.R.S. 2007, provides:
Notwithstanding any other provision of this section, any individual who performs services for pay for another shall be deemed to be an employee, irrespective of whether the common-law relationship of master and servant exists, unless such individual is free from control and direction in the performance of the service, both under the contract for performance of service and in fact and such individual is customarily engaged in an independent trade, occupation, profession, or business related to the service performed.
However, under § 8-40-301(5), a person working as a driver under a lease agreement meeting the requirements set forth in § 40-11.5-102, is excluded from the definition of "employee." Further, a lease agreement which meets the requirements of § 40-11.5-102(4) creates a presumption that the lessee is an independent contractor and that presumption may only be overcome by "clear and convincing evidence." It is also provided in § 8-40-301(6), that any person working as a driver with a common carrier shall be offered workers' compensation insurance coverage by Pinnacol Assurance or similar coverage consistent with the requirements set forth in § 40-11.5-102 (5).
Section 40-11.5-102(5)(a) provides that a lease agreement that qualifies to exclude a driver from the definition of an "employee" must also "provide for coverage under workers' compensation or a private insurance policy that provides similar coverage." Section 40-11.5-102(5)(b), defines the term "similar coverage" as disability insurance for on and off-the-job injuries, health insurance and life insurance.
In USF Distribution Services, Inc. v. Industrial Claim Appeals Office, 111 P.3d 529 (Colo.App. 2004), the issue arose of whether the claimant's failure to secure complying coverage changed his status from that of an independent contractor to that of an employee. The court noted that § 8-40-301(5) was enacted simultaneously with § 8-40-301(6) and § 40-11.5-102(5). See Colo. Sess. Laws 1992, ch. 224 at 1798-801. The court determined that the purpose of these amendments was to clarify that drivers working for contract carriers under qualifying lease agreements are to be treated as "independent contractors" for purposes of workers' compensation benefits liability. The court recognized that § 8-40-301(5) evinces a clear legislative intent to exclude leased drivers from the definition of "employee." However, the court also noted that when the statute is viewed in combination with both § 8-40-301(6) and § 40-11.5-102(5), it becomes clear that the exclusion takes effect only when the lease agreement includes complying coverage. The scheme created by these statutes shares the same purpose underlying the statutory employer provision, see § 8-41-401(1)(a), C.R.S. 2007, which is to prevent an employer from evading compensation coverage by contracting out work instead of directly hiring the workers.
In USF Distribution Services, the court also explained that pursuant to § 8-40-202(2)(c), nothing in § 8-40-202(2)(a) or (b) was intended to conflict with § 8-40-301 or to otherwise relieve any obligation imposed by that statute. The court further reasoned that excepting the driver from the definition of an "employee" under § 8-40-202(2)(a) might conflict with the obligation to provide complying insurance imposed in § 8-40-301(6). Therefore the court concluded that § 8-40-202(2)(a) did not apply to the truck driver in USF Distribution Services. The court further ruled that since the claimant established that the policy negotiated through respondent did not comply with the requirements set forth in § 40-11.5-102(5), the claimant was an employee at the time of his industrial injury.
In our view, there is again, as there was in Abramczuk v. Brisk Transportation, L.P., no principled distinction between USF Distribution Services and the facts of this case. Here, the ALJ found that Brisk was a common carrier, and as the claimant was a driver who delivered goods for Brisk, pursuant to the Act, Brisk was required to either offer the claimant coverage through Pinnacol Assurance or to offer similar coverage. The ALJ found that Brisk did neither.
Here, the ALJ found, and the respondents do not contest, that the claimant completed an "Occupational Accident Insurance Individual Owner-Operator Application." The document was an application for insurance through Great American Insurance Group and the claimant subsequently obtained his policy from Great American Insurance Group. Brisk did not offer the claimant workers' compensation coverage. Brisk also did not offer the claimant insurance coverage through Pinnacol Assurance or any other company.
The ALJ made a detailed comparison of the provisions of the Great American policy and the benefits available under the Act and found a number of significant differences. The ALJ found that the coverage offered to the claimant under the Great American policy did not provide coverage "comparable" to the benefits available under the Act within the meaning of §§ 40.11.5-102 and 8-40-301. Therefore, the ALJ found that the claimant was an employee when he was injured while working as a truck driver for Brisk on November 9, 2004.
In their appeal, the respondents do not contest the ALJ's finding concerning the differences between the Great American policy and the benefits available under the Act. Instead the respondents argue that "affordable" insurance polices are less expensive than polices under the Act and so have restrictions in terms of benefits, but need not be "equivalent" to policies under the Act. The respondents argue that in USF Distribution Services the Court of Appeals erred by judicially rewriting the statute to effectively require alternative insurance to provide benefits in the same amount and under the same conditions as provided for under the Act. We, like the ALJ are, of course, bound to follow the published opinions announced by the court of appeals. C.A.R. 35 (f); Esola v. Publication Printers Corp., W.C. No. 4-671-535 (August 8, 2007); Stegman v. Sears Rosebuck Company, W. C. Nos. 4-559-482 4-483-695 (July 13, 2005);. Therefore, we perceive no error on the part of the ALJ in following USF Distribution Services.
The respondents argue that USF Distribution Services can be distinguished from the present case because here the ALJ found that Brisk was a lessee not a lessor. However, in USF Distribution Services the claimant entered into an agreement under which he leased the tractor truck he owned and was to provide services as a delivery-driver. USF Distribution Services, 111 P.3d at 531. Here the claimant purchased a tractor. The claimant then entered into contractual relationship to use his tractor to pick up and deliver goods for Brisk. In our view, USF Distribution Services is not distinguishable.
II.
The respondents contend that the ALJ erred by failing to make findings of fact and conclusions of law regarding all of the statutory elements of § 8-40-202(2)(B)(II), C.R.S. 2007 sufficient to permit appellate review. As noted above the ALJ found that the insurance coverage under the Great American policy offered to the claimant was not comparable to the benefits offered under the Act. Therefore, the ALJ determined that the claimant was an employee of the respondents at the time of the accident and that the injury was compensable. The ALJ further determined that it was unnecessary to address whether the claimant was an employee under the criteria set forth in § 8-40-202. We agree with the ALJ.
In USF Distribution Services the court concluded that the "claimant could establish his status as an `employee' of respondent for purposes of the Act either by overcoming the presumption created under § 40-11.5-102(4) with clear and convincing proof or by showing that he was not offered coverage that satisfied the requirements set forth in § 40-11.5-102(5)." USF Distribution Services, 111 P.3d at 533. The court found that because the claimant had established the policy, negotiated through the respondent, did not comply with those requirements, it did not need to reach the issue of whether the claimant otherwise established the existence of an employment relationship. In USF Distribution Services the court further noted that pursuant to § 8-40-202(2)(c) nothing within that statutory section is to conflict with § 8-40-301. Consequently, because applying the exception in this instance would conflict with the obligation to provide complying insurance imposed in § 8-40-301(6), the court concluded that § 8-40-202(2) does not apply. USF Distribution Services 111 P.3d at 533. We are not persuaded that the ALJ committed error. See Gebrekidan v. MKBS, LLC, W.C. No. 4-678-723 (May 10, 2007); Abramczuk v. Brisk Transportation, L.P., supra.
III.
The respondents next contend that the ALJ erred by concluding that the claimant was an employee pursuant to § 8-40-301. The respondents argue that the ALJ was first required to determine if the claimant was an employee under § 8-40-202 before proceeding to application of § 8-40-301. The respondents contend that the ALJ was compelled to make a threshold decision as to the claimant's employee status under § 8-40-202 by applying the nine criteria found at § 8-40-202(2)(b)(II) before proceeding to the application of § 8-40-301.
However, it is provided in § 8-40-202(2)(c) that "[nothing] in the section shall be construed to conflict with section 8-40-301 or to relieve any obligations imposed pursuant thereto." As noted above the court of appeals in USF Distribution Services, Inc. specifically dealt with § 8-40-202(2)(c) and because they found that applying the exception would conflict with the obligation to provide complying insurance imposed in § 8-40-301 (6), the court concluded that § 8-40-202(a) does not apply. In our opinion, USF Distribution Services, Inc. is controlling and we perceive no error in the ALJ's reliance on it to find that the claimant was an "employee" at the time of the accident. See also Scott v. Matlack, 1 P.3d 185 (Colo.App. 1999) (holding that leased driver who was also sole owner of his business and who had elected workers' compensation coverage under lease, was not an "employee" pursuant to § 8-40-301(5) and had not surrendered his right to pursue a tort action against the lessor), rev'd on other grounds, 39 P.3d 1160 (Colo. 2002). Therefore, we see no error in the ALJ's consideration of § 8-40-301 without first determining if the claimant was an employee under § 8-40-202.
IV.
The respondents contend that the ALJ erred by failing to apply the lessor or "contractor out" provisions of the Act found in § 8-41-401(3). The respondents argue that it is provided in § 8-41-401(3) that any individual who is excluded from the definition of employee pursuant to § 8-40-202(2) shall not have any cause of action under the Act. The respondents argue that this evidences the General Assembly's specific intent to exclude all persons meeting the § 8-40-202(2) criteria for independence from maintaining a workers' compensation claim.
However, we note that § 8-41-401(7) provides "[this] section shall not apply to any person excluded from the definition of "employee" pursuant to section 8-40-301(5) or (7)." Section 8-40-301(5) deals with the factual situation involved in the instant case where the claimant was injured while working as a driver under a lease agreement with a common carrier. Therefore, we are not persuaded by the respondents' argument that the ALJ should simply have denied the claim under § 8-41-401 and not looked at § 8-40-305.
In addition in USF Distribution Services, Inc. the court of appeals explained that while they recognized that § 8-40-301(5) evinces a clear legislative intent to exclude leased drivers from the definition of "employee," when the statute is viewed in combination with other provisions of the Act it becomes clear that the exclusion takes effect only when the lease agreement includes complying coverage. We again are convinced that USF Distribution Services, Inc. is controlling in the present case.
IT IS THEREFORE ORDERED that the ALJ's orders dated July 17, 2007 and January 8, 2008 are both affirmed.
INDUSTRIAL CLAIM APPEALS PANEL
_________________________________ John D. Baird
_________________________________ Thomas Schrant
THOMAS JOHNSON, 15647 CAROLINE AVE, FT LUPTON, CO, 80621 (Claimant)
BRISK TRANSPORTATION SERVICES, L.P., Attn: TERRY LYNCH, DALLAS, TX, (Employer)
LIBERTY MUTUAL INSURANCE COMPANY, Attn: LATRICE HAYES, IRVING, TX, (Insurer)
THE LAW OFFICES OF BARBARA J FURUTANI, PC, Attn: BARBARA J FURUTANI, ESQ., DENVER, CO, (For Claimant) ZARLENGO, MOTT, ZARLENGO WINBOURN, PC, Attn: SCOTT M BUSSER, ESQ., DENVER, CO, (For Respondents)
BRISK TRANSPORTATION, L.P., Attn: DARRELL ROSE, AURORA, CO, (Other Party)